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This letter responds to your request, on behalf of World Monitors Incorporated
and the Fair Factories Clearinghouse ("FFC"), for the issuance of a
business review letter pursuant to the Department of Justice's Business
Review Procedure, 28 C.F.R. § 50.6. You requested a statement of
the Department's present enforcement intentions regarding the FFC's
proposal to operate a database that member companies can use to collect
and voluntarily share information about workplace conditions in manufacturing
facilities around the globe ("the FFC initiative").

Your request indicates that the FFC initiative is an organic outgrowth
of the activities of the Apparel Industry Partnership ("AIP") and the
Fair Labor Association ("FLA") and that those activities were the subject
of two previous business review letters issued by the Department. On
October 31, 1996, the Department indicated that it would not challenge
the AIP's efforts to develop a Workplace Code of Conduct and Compliance
Monitoring Procedures provided that various steps were taken by AIP's
participants to avoid the exchange among rivals of competitively sensitive
information. On April 7, 2000, the Department indicated that it had
no current intention to institute antitrust enforcement action against
the implementation of the AIP's Workplace Code of Conduct and Monitoring
Principles.

According to your request, the FFC initiative is intended, among other
things, to improve the collection and sharing of information relating
to factory workplace conditions (e.g., information relating to child
labor, forced labor, wages and hours, health and safety, workers' rights,
and related issues). You explain that the FFC initiative is designed
to put individual companies in a better position to ensure that their
suppliers ­ which typically serve multiple customers ­ are
complying with applicable laws and universally-recognized workplace
standards related to the elimination of the use of "sweatshops" in the
manufacture of consumer goods. Further, the FFC initiative is intended
to educate the public on these issues.

You indicate that the FFC would include many of the same members as
the FLA, as well as other large and small participants in the retail
industry. Your request notes that FFC membership is contemplated to
be open to all retailers and brands. The FFC is considering rules that
would make some form of membership available in the future ­ on
an appropriate and non-discriminatory basis ­ to factories, universities,
standard-setting organizations, and buying agents. These entities may
receive less access to information than retailers and brands, but all
entities in a particular membership class would have access to the same
information.

The FFC plans to own and operate a database that member companies can
use to maintain and voluntarily share information about workplace conditions.
FFC members will have the option, but not the obligation, to contribute
information about workplace conditions to the database. The FFC database
of "shared" workplace information on factories will consist primarily
of information that is collected through audits undertaken or commissioned
by member companies. The database will not "rate" factories as good
or bad, but will set forth objective information collected by the auditor
relating to the terms and conditions of employment, such as wages, use
of underage labor, workplace safety, and the like. You have described
it as a "decision support tool" to be used by individual FFC member
companies in choosing factories from which to source their products.
Factories can also submit audits that they commissioned on their own,
provided such audits satisfy the requirements of the FFC.

The FFC initiative potentially raises concerns in part because some
audits in the database may include certain factories' wage and hour
information and because it may facilitate concerted action by FFC members
against factories. You respond to these concerns in several ways. First,
you describe aspects of the FFC initiative that should protect against
anticompetitive effects. Second, you indicate that the FFC will have
the procompetitive effect of making the collection and use of information
about factory workplace conditions more efficient. Third, you indicate
that the FFC initiative will not significantly affect the prices paid
by U.S. consumers.

Your request sets forth several aspects of the FFC initiative that,
you suggest, will protect against anticompetitive effects. First, the
FFC initiative will be entirely voluntary. Each member will decide for
itself whether or not to participate, whether to contribute information
to the database, and what information to contribute to the database.
Second, factories will not have access to competitor wage and hour information
in the database, except in an aggregated form that will not enable entity-specific
information to be ascertained. Finally, FFC members will be required
to comply with its Antitrust Policy Statement, violation of which will
be grounds for termination of membership. Among other things, the Policy
requires that outside counsel be present at all meetings of the FFC
Board and membership and makes clear that all decisions regarding whether
a particular member will use a factory will be made unilaterally by
that individual member. Additional antitrust issues would arise if there
are discussions among FFC members regarding the content of the audit
database or any actions that they might take based on the data, and
this business review letter does not indicate the Department's enforcement
intentions with respect to such potential activity.

In addition, you indicate that the FFC initiative will make the collection
and use of information about factory workplace conditions better and
more efficient. Specifically, the database will provide members with
a mechanism for sharing audit information regarding facilities from
which they source their goods, thus reducing costly, duplicative, and
disruptive audits at common production facilities.

Although not dispositive here, your letter indicates that it is unlikely
that the FFC initiative would have an appreciable impact on the prices
or output of apparel and footwear products sold in the United States
because labor typically accounts for less than 3% of the United States
retail price of clothing made in domestic factories and as little as
0.5% for garments sewn abroad. You indicate your belief that the same
is true with respect to the de minimis relationship between
labor costs and the price of other retail and light industry goods manufactured
by entities that may ultimately become members of the FFC.

Based on the information and representations that you have provided,
the Department of Justice has no current intention to institute antitrust
enforcement action against the FFC initiative. Under the circumstances
you have asserted, the FFC initiative should yield some cost saving
benefits. The initiative is adopting safeguards against the exchange
among factories of competitively sensitive information. It is also unlikely
that the creation of a database of workplace audit information as described
above would by itself have anticompetitive effects through the facilitation
of collusion among the customers of the factories being audited.

This letter expresses the Department's current enforcement intentions
and is predicated on the accuracy of the information and assertions
that you have presented to us. In accordance with its normal practice,
the Department reserves the right to bring an enforcement action in
the future if the actual implementation of the FFC initiative proves
to be anticompetitive.

This statement is made in accordance with the Department's Business
Review Procedure, 28 C.F.R. § 50.6. Pursuant to its terms,
your business review request and this letter will be made publicly available
immediately, and any supporting data will be made publicly available
within thirty days of the date of this letter, unless you request that
any part of the material be withheld in accordance with Paragraph 10(c)
of the business review procedure.